May 29th, 2009 First quarter Gross Domestic Product figures for 2009, show that the Belizean economy contracted by 2.2% in real terms when compared with the same period of 2008.

The main drivers of the decline in economic activity in the first quarter were the wholesale and retail and agriculture sectors. Wholesale and retail activity contracted 14 percent, a significant turnaround when compared to a 4.0 percent growth in the same period of 2008. The decline was underpinned by a slow-down in trade which was evident in a 15.1 percent reduction in merchandise imports. The agriculture sector fell by 6.8 percent largely as a result of a 17.6 percent decline in banana production. The slowdown in banana production falls within expectations and was mainly due to a downward correction from the 2008 first quarter surge that was a result of an EU replanting project and the recovery from diseases in late 2007.

Weighed down by the weakness in tourism, which is attributable to the global financial crisis, the services producing industries (hotels and restaurants) contracted by 10.7 percent, much worse than the previous quarter’s contraction of 1.3 percent. Stay-over tourist arrivals slumped by 11.0 percent while cruise ship arrivals also fell by 1.9 percent.

Partly offsetting the declines in gross domestic product was private business and financial services which were up 10.4 percent in the first quarter. The construction and manufacturing sectors also provided a small boost to the economy reporting increases of 6.2 percent and 5.5 percent, respectively.

Rapid survey shows significant decline in business, and worries over the months ahead

The Belize Tourism Industry Association (BTIA) held its Bi-Annual General Meeting Wednesday afternoon at the Radisson Fort George Hotel in Belize City, where executive director, Nicole Solano, unveiled the results of a recent 10-day rapid survey, which gives an insight into the state of Belize’s tourism industry.

The results of the BTIA survey, culled from online responses from 122 respondents – the bulk of them hoteliers – signal a worrying state of affairs. Roughly 23% of hotels are planning on closing during the slow months (the next five months from May to September) until the sector makes an upswing.

According to Solano, the survey respondents indicate that while many of them are doing OK for the moment, they are worried about the times ahead, even as they hold out for what they hope will be better times ahead, in the 2009/2010 season.

Most say that they operate with minimal staff, and because they have opted to reduce rates, revenues are down, though no concrete dollar figures were provided in the reports.

Apart from the hoteliers – a small sampling of the over 600 hotels existing in Belize – there were also tour operators, transportation providers, and food and beverage enterprises who participated in the survey. The largest percentage of the respondents is based in Placencia, Stann Creek.

As the accompanying graph indicates, 57% of those who took part in the survey, conducted between May 11 and 21, complained that their businesses have suffered declines in activity since January, and the #1 factor blamed for the decline is the global financial crisis.

However, that was not the only negative influence that the industry has had to contend with. The other factors blamed for declining business are high airfares, taxation, crime in Belize, lack of effective marketing, the swine flu (A/H1N1) scare, low product and service standards, and safety standards for tours and equipment, in that order. Still, the tourism enterprises do not think that the impacts are that severe.

The industry stakeholders are predicting that the economic storm will continue to affect them even in the months ahead. For example, 70% are predicting a decrease in business at the close of 2009, and a third are projecting that business will fall off by more than 20%, while four of the respondents are giving up, and they said they would either sell or close down their businesses.

Belize City tourism enterprises suffer particularly from the bad rap the City gets because of crime, and some tourists advise others to stay away from the Old Capital, and go to the ruins and the cayes, instead.It is interesting to note that even though the prospects for some tourism businesses seem rather grim, there are others who are experiencing better fortunes, despite the ongoing financial challenges.

The survey report says that 17% of those who responded are actually projecting an increase since 2009 began. Even though roughly 40% had reduced staff numbers or their hours, 15% had actually hired more workers.

So what are those businesses that have been growing, doing that others have not been?

The bottom-line message seems to be that Belizean tourism stakeholders simply need to get the word out more – and the word that gets out must be enticing to visitors.

The majority of respondents who experienced growth in the first part of 2009 cite an increase in word- of-mouth referrals as the top reason for increase in business. Heavy investment was the next factor cited, while the third reason was having a new and innovative product.

The BTIA hopes to use the results of the rapid survey “to advocate and lobby with the Government of Belize, on behalf of the tourism private sector.”

The BTIA points to declarations made by its regional affiliate, the Caribbean Hotel and Tourism Association (CHTA), calling out governments of the region for allegedly not grasping the enormity of the challenges facing tourism, in light of the 3% decline in tourist arrivals in 2008 compared to 2007. The BTIA reports that the CHTA is planning a region-wide publicity campaign to call on governments to give more support to the sector.

At today’s meeting of members, the BTIA had a guest speaker from the USA, Dale Stewart (www.dalestewart.com), who reminded tourism stakeholders in Belize of the need to market Belize as a unique destination, offering what he described as customized tours, high on interaction and educational content, and using the local expertise available to make the visits of tourists more enlightening and enjoyable, and an experience they could not get anywhere else in the world.

He also said that Belize could easily become a mecca for educational tourism.

At the very start of his presentation, Stewart noted that despite the global economic crisis, some businesses have actually experienced growth, and the key, he said, is to “keep an open mind.”

A businessperson will run into trouble, he cautioned, “…if you let all the doom and gloom that you hear out there drive the decisions that you make.”

The global economic downturn, said Stewart, should be viewed as an opportunity to reassess business fundamentals, to be smart with money, as “cash is king,” and to make extra investments in marketing and strategic planning.

He also urged adaptive leadership: “Adaptive leadership is about making rapid decisions during times of crisis, and making decisions during these times of crisis when things are happening to our industry or happening at your homes or business.”

Stewart also raised the point – not a new one for tourism leaders – that Belize, as a whole, needs to be marketed as a destination, and rather than being copycats in promoting Belize with standard images, leaders need to use their creativity to ensure that when Belize is presented to the world, that it stands out in a way that will invite people to visit for an unforgettable experience.

Stewart noted that there are still many abroad who are clueless about Belize, and he pointed to his own mini-survey, which he did in South Carolina before coming to Belize, on what he described as a high-priced airline ticket, with a cost that could have taken him halfway around the world.

“Where is Belize?” he asked Americans.

“I got everything from it’s somewhere on the other side of Yucatan and it’s part of Mexico…one of them thought it was in South America; one guy thought it was somewhere off the coast of Africa…,” he said, and added that some guessed the official language of Belize to be Spanish.

“I was amazed that they did not know that Belize was an English-speaking country,” he said.

At the recent Fifth Summit of the Americas, Prime Minister Dean Barrow learned that Barack Obama, US president, also did not know of Belize, though after hearing about Belize from PM Barrow, he began entertaining prospects of an imminent visit.

Official state visits can do a lot for a country’s international prestige. For example, this week’s state visit by the President of Taiwan, Ma Ying-jeou, has catapulted Belize into the spotlight, as one of the top names being discussed in the international news media, particularly in light of the fact that Ma makes his first official showing in Central America on Belizean soil.

Before his departure on Friday morning, President Ma plans to do some sightseeing, as he is scheduled to go on tour at Hol Chan Marine Reserve on Ambergris Caye.